The issue of whether a partnership continues or terminates for U.S. federal income tax purposes frequently arises in restructuring transactions.
Partnership and LLC Taxation
It can be difficult to determine whether a partnership that retains de minimis assets or performs administrative functions during its winding-up period terminates, particularly if such activities cross tax years.
Passthrough owners must consider many risks and uncertainties, in addition to political trends on Capitol Hill, before opting into a state-level regime designed to bypass the $10,000 SALT deduction cap created by the TCJA.
LLCs can help families achieve key business and tax objectives, while also providing liability protection and concentrating management power in the hands of less than all of the owners.
Taxpayers dealing with tax basis step-up transactions involving related parties or rollover equity interests should consider the application of the anti-churning rules to avoid unforeseen results.
The final regulations provide relief to hedge funds and their passive investors, although the regulations may increase the administrative burden and reporting requirements on hedge fund managers.
This article addresses certain aspects of the withholding rules of the final Sec. 1446(f) regulations, options to eliminate or reduce Sec. 1446(f) withholding, and some outstanding issues.
This article reviews and analyzes recent law changes as well as rulings and decisions involving partnerships.
As short-term agreements that borrowers and creditors reached at the beginning of the pandemic start to expire, real estate companies and others will need to find long-term solutions to their insolvency problem.
The IRS finalized proposed regulations on certain carried interests to account for changes made by the TCJA.
This article focuses on the Sec. 465 at-risk limitation, one of the rules that could disallow all or part of a partner’s deduction of an allocable loss from a partnership.
If LLC members’ tax allocations are not made in accordance with the members’ interests in the LLC, they must fit into the substantial-economic-effect safe harbor.
In FAA 20204201F, the IRS concluded that the Sec. 704(c) allocation method adopted by a partnership between a U.S. corporation and its domestic and foreign affiliates was unreasonable under the Sec. 704(c) anti-abuse rule.
The form has been developed due to an increase in Sec. 754 election revocation applications since the technical termination of a partnership under former Sec. 708(b)(1) (B) was repealed under the TCJA.
Proposed regulations provide that the IRS may determine that the centralized partnership audit regime does not apply to adjustments to partnership-related items under certain conditions.
A donated conservation easement has top-of-market value.
Errors by partnerships in reporting partners’ tax capital accounts under new rules for 2020 may be excused, the IRS outlined.
The IRS finalized proposed regulations on certain carried interests to account for changes made by the Tax Cuts and Jobs Act (TCJA). The TCJA extended from one year to three years the holding period for making carried interests eligible for capital gain treatment.
The IRS released draft instructions for Form 1065 to calculate partner capital accounts using the tax-basis method.
This item discusses proposed regulations regarding the tax treatment of carried interests.